Archives for category: Ethics

Cyber charters in Pennsylvania are a money pit because they are not subject to the same rules as public schools. Charter lobbyists must have written the charter laws as they have in other states. And they protect their freedom from scrutiny despite the fact that the founder of the first and biggest cyber charter operator in the state was sentenced to prison in 2018 for his failure to pay taxes on $8 million that he skimmed from the school’s funds. (Note that he was not jailed for embezzling funds but for not paying taxes on the money.)

Peter Greene discovered another way that the state’s cyber charters get favored treatment. Public schools are not allowed to sit on millions of dollars of rainy day funds. Cyber charters are.

I remember what charter advocates promised back in the late 1980s when the idea of charters was first being sold. Charters would be more “accountable” than regular public schools.

But now we know:

Accountability is for public schools, not for charter schools.

What a wonderful story from World War 1. Please read it. These men and boys were not enemies. The politicians told them they were.

On a frosty, starlit night, a miracle took place. In 1914, a melody drifted over the darkness of No Man’s Land. First “O, Holy Night,” then “God Save the King.”

Peeking over their trenches for what must have been the first time in weeks, British soldiers were surprised to see Christmas trees lit with candles on the parapets of the enemy’s trenches.
Then a shout: “You no shoot, we no shoot!”

The Christmas Truce was a brief, spontaneous cease-fire that spread up and down the Western Front in the first year of World War I. It’s also a symbol of the peace on Earth and goodwill toward humans so often lacking not just on the battlefront but in our everyday lives.

In that spirit, the National World War I Museum and Memorial in Kansas City has published an online gallery of hundreds of accounts of such Christmas truces — letters home from soldiers that were published in British papers.

Here, a sampling of these letters shows the variety and wonder of the Christmas Truce:

“This has been the most wonderful Christmas I have ever struck. We were in the trenches on Christmas Eve, and about 8.30 the firing was almost at a stand still. Then the Germans started shouting across to us, ‘a happy Christmas’ and commenced putting up lots of Christmas trees with hundreds of candles on the parapets of their trenches.” — Cpl. Leon Harris, 13th Battalion, London Regiment (Kensington)

“At 2 am on Christmas morning a German band played a couple of German tunes and then ‘Home, Sweet Home’ very touchingly which made some fellows think a bit. After they played ‘God Save The King’ and we all cheered.” — Pvt. H. Dixon, Royal Warwickshire Regiment

“We would sing a song or a carol first and then they would sing one and I tell you they can harmonise all right.” — Pvt. G. Layton, A Company, 1st Royal Warwickshire Regiment
“Half-way they were met by four Germans, who said they would not shoot on Christmas Day if we did not. They gave our fellows cigars and a bottle of wine and were given a cake and cigarettes. When they came back I went out with some more of our fellows and we were met by about 30 Germans, who seemed to be very nice fellows. I got one of them to write his name and address on a postcard as a souvenir. All through the night we sang carols to them and they sang to us and one played ‘God Save the King’ on a mouth organ.” — Rifleman C.H. Brazier, Queen’s Westminsters of Bishop’s Stortford

German and British soldiers stand together on the battlefield near Ploegsteert, Belgium, during the Christmas Truce. (Imperial War Museum/AP)

“We soon came up to them. About 30 could speak English. One fellow wanted a letter posted to his sweetheart in London.” — Gunner Masterton
“Between the trenches there were a lot of dead Germans whom we helped to bury. In one place where the trenches are only 25 yards apart we could see dead Germans half-buried, their legs and gloved hands sticking out of the ground. The trenches in this position are so close that they are called ‘The Death Trap’, as hundreds have been killed there.” — A junior officer

“On Christmas Day we were out of the trenches along with the Germans, some of whom had a song and dance, while two of our platoons had a game of football. It was surprising to see the German soldiers — some appeared old, others were boys, and others wore glasses . . . A number of our fellows have got addresses from the Germans and are going to try and meet one another after the war.” — Pvt. Farnden, Rifle Brigade

“On our right was a regiment of Prussian Guards and on our left was a Saxon regiment. On Christmas morning some of our fellows shouted across to them saying that if they would not fire our chaps would meet them half-way between the trenches and spend Christmas as friends. They consented to do so. Our chaps at once went out and when in the open Prussians fired on our men killing two and wounding several more. The Saxons, who behaved like gentlemen, threatened the Prussians if they did the same trick again. Well, during Christmas Day our fellows and the Saxons fixed up a table between the two trenches and they spent a happy time together, and exchanged souvenirs and presented one another with little keepsakes.” — A British soldier


“One of our men was given a bottle of wine in which to drink the King’s health. The regiment actually had a football match with the Germans who beat them 3-2.” — A British officer

American filmmaker, Wilbur H. Durborough made a silent documentary film called “On the Firing Line With the Germans” about the German army during World War I. (Courtesy: Library of Congress)


“You said I should probably hardly know it was Christmas Day, but far from it; we had a most extraordinary day and quite different from others. . . . Lots of English and Germans met between the two lines and had talks . . . there were bicycle races on bikes without tyres found in the ruins of the house.” — A British officer

“A hundred yards or so in the rear of our trenches there were houses that had been shelled. These were explored with some of the regulars and we found old bicycles, top-hats, straw hats, umbrellas etc. We dressed ourselves up in these and went over to the Germans. It seemed so comical to see fellows walking about in top-hats and with umbrellas up. Some rode the bicycles backwards. We had some fine sport and made the Germans laugh.” — Brazier

“I daresay you will be surprised at me writing a letter on such paper as this, but you will be more surprised when I tell you that it contained cake given to one of our men by a German officer on Christmas Day, and that I was given some of it . . . We were able to bury our dead, some of whom had been lying there for six weeks or more. We are still on speaking terms with them, so that we have not fired a shot at them up to now (Dec. 29), neither have they, so that the snipers on each side have had a rest.” — Pvt. Alfred Smith, 1st Battalion, Royal Warwickshire Regiment

“Really you would hardly have thought we were at war. Here we were, enemy talking to enemy. They like ourselves with mothers, with sweethearts, with wives waiting to welcome us home again. And to think within a few hours we shall be firing at each other again.” — Masterson

Gillian Brockell is a staff writer for The Washington Post’s history blog, Retropolis. She has been at The Post since 2013 and previously worked as a video editor.

This article in the Capital & Main series was written by Marcus Baram and is titled ”Inside the Secretive World of Union-Busting: Here’s How Much Corporations Pay to Bust Unions.” Subtitle: “U.S. companies spend hundreds of millions of dollars per year to ensure workers don’t organize.”

It begins:

A handful of workers at the Dollar General In the small Connecticut town of Barkhamsted had grown frustrated last September at being poorly treated by a district manager, amid allegations

The organizing effort involved just six workers (five after one said he was fired for his efforts to unionize) earning $13 an hour — so about $624 a day in total — but the company spent multiples of that to combat the union drive. Dollar General paid Labor Relations Institute, a firm known for its union avoidance consulting, a fee of $2,700 per day for each consultant it brought in, according to filings with the Department of Labor. LRI used five consultants, who reportedly held one-on-one meetings with workers and conducted group sessions to educate them on the risks of joining a union. In the end, the unionization effort failed and the company breathed a sigh of relief. The retail giant posted $33.7 billion in sales and $2.7 billion in profit in 2020, but remains convinced its future earnings might have been hurt if any of its 157,000 workers joined a union.

What do you say when a corporation cares more about profits than the lives of its workers?

In part one of its review of union busting, written by Jo Constantz, Capital & Main examines how employers use technology to defeat unions.

It begins:

During a Zoom call set up by union representatives and employees who had organized a worker organizing committee, “We noticed that managers of the company had busted into the meeting — they had crashed our Zoom call,” recalls Lorena Lopez, a director of organizing with UNITE HERE Local 11. “Workers started to get very nervous and shut down their cameras so they wouldn’t be recognized. I was running the meeting and asked everyone to ID themselves. But the company people refused.” During the meeting, a worker on the cleaning crew had volunteered to be the spokesperson for the group. According to Lopez, this worker was confronted by management the next day and pressured to quit.

“They were spying on us — and it was easy to do via Zoom,” she says. Under a settlement agreement with the NLRB, the company agreed to post flyersinforming employers of their right to unionize and pledged not to ask them about organizing efforts and not to surveil their Zoom meetings. A lawyer for the company did not return requests for comment.

Workplace surveillance, already widespread in the U.S., has become even more prevalent during the pandemic as employers try to enforce public health measures and monitor remote workers. According to research by Gartner, a market research firm, 60% of large employers use workplace monitoring tools, twice as many as before the pandemic. Coworker.org, a labor research nonprofit, recently compiled a database of over 550 of these commercially available products, which it dubs “little tech,” and published a study outlining potential harms and noting the industry’s general lack of regulation.

Open the link and keep reading.

After months of negotiations among Democrats over the fate of President Biden’s historic $3.5 trillion proposal, a compromise seems to have been reached (although nothing is certain). At the insistence of Democratic Senators Manchin and Sinema, the size of the ambitious plan has been cut in half. Many of its parts were cut away, including two years of free community college and 12 weeks of paid family leave for medical reasons (the U.S. is the only major nation that doesn’t provide it). Three Democratic members of the House killed the provision to lower prescription drugs. And of course the Republicans opposed everything.

This is how Harold Meyerson of The American Prospect described it.

World’s Biggest Half-Full, Half-Empty Glass

Biden’s bill is historically great and bitterly disappointing.


Well—had we not anticipated, had it never seemed, that the Democrats, having won control of Congress and the White House, would proceed to enact paid family leave, expansions of Medicare, a permanent Child Tax Credit, disincentives to fossil fuel use, the ability to negotiate down drug prices, and such—had we not counted on that, then today would be a day of unmitigated celebration. Instead, celebration of the groundbreaking social provisions that actually are in the bill President Biden outlined today—universal pre-K, child care subsidies, incentives for clean energy, commonsense tax reforms that will compel corporations to pay some taxes, and the like—has to be mitigated by the fate of the even more commonsense provisions that now lie on the cutting-room floor.

For me, the most absurd relegation to that floor has been killing the proposal to give Medicare the ability to bring down drug prices. Seldom is a serious change to social and economic policy backed by more than three-fourths of the public, but this one surely was. Reportedly, President Biden has persuaded Kyrsten Sinema to accept a deal so preposterously weak—one that enables Medicare to negotiate down the price of drugs whose patents have expired (that is, after the big drug companies have wrung out the lion’s share of profits on those drugs, and which simply incentivizes those companies to extend their patents)—that few Democrats on the Hill seem inclined to vote for it. (Its merits are so nonexistent that the provision was omitted from Biden’s bill.)

By opposing giving Medicare the capacity to stop Big Pharma from charging Americans vastly more for their medications than they charge the citizens of any other nation, Sinema and three House Democrats effectively killed the one provision of the proposed $3.5 trillion package that would have most reduced the cost of living, significantly slowed the pace of inflation, and quite possibly moved more swing votes into the Democrats’ column than any other.

Leading the resistance to this measure in the House was Scott Peters, the California Democrat whose North San Diego County district includes many of the biotech companies that reap fortunes from high drug prices. While Sinema and the two other House Democrats who joined with Peters can likely be successfully primaried, the economy of Peters’s district is so dependent on high drug prices that he might well survive such a challenge…

One provision of the PRO Act—which, taken as a whole, would have been a new Magna Carta for American workers—has made it into Biden’s bill. The provision requires employers to pay fines ranging from $50,000 to $100,000 when they commit unfair labor practices, such as firing employees for their pro-union activities. Under current law, there are effectively no penalties assessed on employers when they’re found guilty of such practices. By excluding the more fundamental provisions of the PRO Act from Biden’s bill, chiefly because they don’t fit under rules of reconciliation, the employer-employee playing field remains steeply tilted toward employers, but if these fines pass muster with the Senate parliamentarian (an open question), they do reduce that tilt by a decidedly modest margin.

As befits a half-empty, if also half-full, glass.


~ HAROLD MEYERSON

The House of Representatives recently passed a budget that excluded for-profit charter schools from receiving federal funds. The federal Charter Schools Program has doled out many millions to for-profits over the years, despite the fact that their need for profit reduces their funding for instruction, small classes, and experienced teachers. The Senate has not yet taken action on the budget but the charter lobbyists are pushing hard to protect their for-profit friends. In the past, the charter industry shunned the profiteers, but they stand with them in solidarity to hang on to their access to federal funds.

Does it matter whether a charter operates for-profit or not? Jeff Bryant explains how the introduction of profiteering has harmed not only the schools but other sectors as well. Bryant is an independent journalist who has written frequently about school privatization.

He begins:

Charter school industry lobbyists, who appear to have lost a fight in the U.S. House of Representatives over an appropriations bill that cuts federal funding to charter schools operated by for-profit businesses, are rolling out a campaign to defend their taxpayer revenues in the U.S. Senate, but federal lawmakers may wish to consider new evidence of how for-profit charter enterprises introduce potential harms into public education.

One such potential harm, according to an in-depth examination conducted by Our Schools, stems from for-profit charter school operators partnering with private investors intent on turning quick profits from public dollars meant for educating children.

Our Schools examined the relationship between Pansophic Learning, owner of the Accel Schools chain of for-profit charter schools, and Safanad Limited, a private equity firm, originating in the Middle East, with extensive investment holdings in K-12 education, senior living, and other public sector-related enterprises.

What Our Schools found was that for-profit businesses like Pansophic Learning are providing entryways for wealthy investors from abroad to flood the U.S. with money to buy up struggling taxpayer-funded enterprises and put into place elaborate business schemes and networks of interrelated companies that hide their profiteering while doing little to improve the quality of services to the public.

A request for comment regarding Pansophic’s relationship with Safanad and the partnership’s potential for conflicts of interest that was left as a press inquiry at the Pansophic website did not receive a reply.

The combination of for-profit operators backed by private equity has become prevalent in other publicly funded sectors that have traditionally been operated by federal and/or state governments or nonprofit organizations. And the results have not been beneficial to the public or the individuals the publicly funded system was intended to serve.

For example, in the government-funded prison system, “The involvement of private equity firms, which manage large investment portfolios, presents a conflict between the financial and social goals of some investors,” reported Prison Legal News in 2019, citing two studies—one from the nonprofit Worth Rises, which advocates for “dismantling the prison industry,” and the other from the American Federation of Teachers, a national teachers’ union.

Another analysis, by the ACLU, found that for-profit prison operators backed by private investors are more apt to create profit for their investors by maintaining high rates of incarceration, which results in significantly higher social and fiscal costs to the public.

Our Schools found that this combination of for-profit entrepreneurs backed by private investors is having a similarly corrosive impact in the charter school industry.

Ron Packard and K12 Inc.

The genesis of Accel Schools goes back to 2014, when Education Week reported that Ron Packard, the former CEO of K12 Inc., had formed a new education enterprise called Pansophic Learning. K12 Inc., which changed its name to Stride Inc. in 2020, was then, and still is, the largest for-profit charter school operator in the U.S.

Packard, a former Goldman Sachs executive who specialized in mergers and acquisitions, departed K12 Inc., which he founded, at a time when the company was besieged with negative publicity.

In 2011, K12 Inc. was the subject of a scathing story in the New York Times revealing that “only a third” of the students enrolled in its online charter schools “achieved adequate yearly progress, the measurement mandated by federal No Child Left Behind legislation,” while the company employed multiple ways to “squeeze profits from public school dollars by raising enrollment, increasing teacher workload, and lowering standards.”

The withering critique, which ran on the newspaper’s front page, “caused” the publicly traded company’s stock price “to drop precipitously,” Education Week reported in 2012, and prompted a shareholder to file a federal lawsuit accusing K12 Inc. executives, including Packard, of “misleading investors with false student-performance claims.”

More negative publicity came in 2013 when Politico reported K12 Inc. was one among many online charter schools that “posts dismal scores on math, writing, and science tests and mediocre scores on reading.” Another blow came that year when influential hedge fund manager and charter school proponent Whitney Tilsonannounced he was shorting K12 Inc. stock, betting the company would fail.

In 2014, K12 Inc. became the target of yet another lawsuit accusing the company of “misleading investors by putting forward overly positive public statements… only later to reveal that it had missed key operational and financial targets,” Education Week reported. The lawsuit also charged Packard, whose relationship to the company had become unclear, of selling off his own stock before revealing the negative financials, and, thus, earning a windfall of $6.4 million before the stock price plunged.

But as Packard disengaged from one troubled education enterprise, he started another with a financial partner that would provide the capital to quickly scale up.

As Education Week reported in 2014, Packard’s new company, Pansophic Learning, included a partnership with a holding company, Safanad Education, a subsidiary of Safanad Limited, a New York- and Dubai-based real estate and investment firm. Packard and Safanad spent an unknown sum to purchase part of K12 Inc.’s assets, mostly in higher education, and acquire an international brick-and-mortar private school. The two entrepreneurs were “on the hunt for acquisitions,” according to Education Week.

A Charter School Shopping Spree

Initially, Packard and Pansophic Learning kept a low profile until, in 2016, a visit by then-Republican presidential nominee Donald Trump drew attention to a Cleveland, Ohio, brick-and-mortar charter school “that usually escapes notice,” reported the Plain Dealer, a Cleveland newspaper.

According to the Plain Dealer, the school, the Cleveland Arts and Social Sciences Academy, was one of 27 schools in Colorado, Illinois, Michigan, Minnesota, and Ohio that had been recently acquired by Accel Schools, a new for-profit network of charter schools owned and operated by Pansophic Learning.

Packard is listed as the CEO of both Pansophic Learning and Accel Schools. Two other C-suite executives of both Pansophic Learning and Accel Schools are COO Maria Szalay and CTO Eric Waller. Pansophic Learning and Accel Schools also have an identical street address in McLean, Virginia.

Prior to the news about Trump visiting its school, Accel Schools had been “amassing an education empire” in Ohio, the Akron Beacon Journal reported.

Among its acquisitions were, in 2014, the “troubled K-8 schools” of White Hat Management, which had previously been, according to the Akron Beacon Journal, Ohio’s largest charter school chain. In 2019, Accel Schools purchased White Hat’s last remaining online charter school as well.

In 2015, Accel Schools also acquired the assets of another financially struggling charter management firm, Mosaica Education, and bought Cleveland-based I Can Schools, which, Packard told the Plain Dealer, were also “struggling financially.”

The charter school shopping spree Accel Schools went on undoubtedly benefited from the financial support of Safanad.

“We are fortunate to partner with Safanad,” Packard is quoted saying in Safanad’s official announcement of its partnership with Pansophic Learning in 2014. “Safanad’s extensive resources will allow us to pursue opportunities of all sizes,” he said.

The Bahamdan Connection

According to the firm’s website, Safanad’s founder and CEO is Kamal Bahamdan, a Saudi national. “Mr. Bahamdan has also been the CEO of the Bahamdan [investment] Group,” according to his profile.

Kamal Bahamdan’s current relationship with the Bahamdan Investment Group is unclear, but the Bahamdan firm maintains a controlling interest in Safanad. According to its SEC filings brochure, Safanad is “controlled by Bahamdan Investment Group and KB Group Holdings Ltd.” KB Group Holdings Ltd., according to Safanad’s SEC filing form, is owned by the Bahamdan Investment Group.

The Bahamdan Investment Group is a Saudi-based investment firm founded by Sheikh Abdullah Salem Bahamdan, Kamal Bahamdan’s father, according to Rocket Reach, a corporate sales, recruiting, and marketing website that published a Bahamdan company history calling Kamal Bahamdan the “third generation” of financial leadership of the Bahamdan Investment Group and “[Abdullah] Bahamdan’s son.”

In numerous online profiles, Abdullah Salem Bahamdan (also Abdullah S. Bahamdan, Abdullah Salim Bahamdan, and Abdullah Bahamdan) is described as a “seasoned banker” and one of “the Middle East’s most prominent and influential financiers.”

Abdullah Bahamdan also spent more than 50 years as the chairman of “Saudi Arabia’s National Commercial Bank, the largest lender in the Arab world,” according to Institutional Investor. National Commercial Bank (NCB), which merged with Samba Financial Group in 2021 to form Saudi National Bank (SNB), was established in 1953 by royal decree, according to the SNB website, with the Saudi government as its major shareholder.

Despite its close relationship to the Saudi government, NCB was one among 16 financial institutions that were fined by the Saudi Monetary Authority in 2019 “for violating principles of responsible finance,” according to Reuters. “[T]he violations were related to exceeding debt burdens imposed on people in proportion to their monthly income.”

In 2020, the U.S. Treasury Department settled a lawsuit with NCB accusing the bank of violating U.S. sanctions against Syria and Sudan between November 2011 to August 2014.

The bank and Abdullah Bahamdan have been the subjects of at least two lawsuits accusing them of financing terrorist groups, which may have been part of what prompted the Saudi government to, in 2017, “crack down on corruption” in its banking industry, Reuters reported.

Perhaps as a result of the crackdown, SNB claims on its website that it “has developed a Bank-wide Anti-Money Laundering and Combating Terrorist Financing Policy.”

Mixing Charter School Investments With Subpar Senior Care

Aside from its investments in Pansophic Learning, Safanad has made some of its biggest commercial real estate deals in the health care sector, principally in senior care facilities, including assisted living, independent living, memory care, and nursing homes, frequently called skilled nursing facilities.

Senior Housing News reported that Safanad teamed up with investment firm Formation Capital, an Atlanta-based health-care-focused private investment company, to purchase 36 senior care facilities in 2011, and, in 2012, the partners spent $750 million to acquire 68 more nursing homes located in East Coast states. The acquisitions made the two investment firms “one of the United States’ largest standalone skilled nursing portfolios,” according to Senior Housing News, with “more than $1 billion worth of senior care assets in the U.S.”

In 2013, the same two investment firms purchased a “36-property senior housing portfolio for approximately $400 million,” reported Senior Housing News, and in 2014, the two firms struck another deal to buy “14 skilled nursing facilities in the mid-Atlantic for about $150 million,” according to Senior Housing News.

The deals Safanad and Formation Capital struck to acquire senior care facilities are strikingly similar to the business transactions Safanad conducted with Pansophic Learning in the charter school sector, principally, buying up financially struggling service businesses that receive large amounts of public funding—in the case of the senior care sector, from Medicare and Medicaid—and that also happen to include significant holdings of real estate.

The nursing home and senior living facilities industry was struggling financially before the pandemic, according to a report by the Pew Charitable Trust. Facilities had been cutting corners for years, skating by with too few staff, due to stagnating wages, and sometimes hiring unskilled workers instead of highly trained personnel.

COVID-19 simply revealed an industry that was already “broken,” reported NBC News, citing “low pay, high turnover, and tough working conditions” as chronic problems in the senior care facilities industry.

Yet the growing presence of private equity investors in the senior care industry has done little to help the industry and appears to have done mostly harm.

2020 study found that private equity ownership of nursing homes and other kinds of senior living facilities increased costs to the public by 19 percent while shortening the lifespans of patients.

Patients in facilities with substantial private equity backing tended to have less access to nurses, declining mobility, and greater use of antipsychotic medications, the study found. Consequently, “private equity ownership increases short-term mortality by 10 percent,” the authors claimed, “which implies about 21,000 lives lost due to private equity ownership over our sample period.”

As with the for-profit prison industry, many of the problems posed by private investment firms in the senior care industry, according to the study, can be sourced to “high-powered for-profit incentives… [being] misaligned with the social goals of quality care at a reasonable cost.”

The study distinguished private equity for-profit ownership from “generic” for-profit ownership because “private equity ownership confers distinct incentives to quickly and substantially increase the value of their portfolio firms.” It is this form of intense, high-powered profit-maximizing incentives, the authors asserted, “that characterize[s] private equity… [and could lead to] detrimental implications for consumer welfare.”

Investor-driven senior care facilities were especially hard hit by the COVID-19 pandemic, a 2020 article in the New York Times reported.

“Decades of ownership by private equity and other private investment firms left many nursing homes with staggering bills and razor-thin margins,” according to the article.

“The toll of putting profits first started to show when the outbreak began,” the article continued. “[S]ome for-profit homes were particularly ill equipped and understaffed, which undercut their ability to contain the spread of the coronavirus.”

Among the for-profit operators that appear to have fared poorly in the pandemic is Consulate Health Care, one of the providers that were snapped up by Safanad and Formation Capital in 2014, according to Senior Housing News. In a 2021 report, the Private Equity Stakeholder Project lists Formation Capital as the owner of Consulate Health Care.

Nursing homes operated by Consulate Health Care and Formation Capital have been hotspots for COVID-19 outbreaks, according to numerous news reports from Florida and Virginia. The high incidence of outbreaks has, in part, prompted a U.S. House committee to launch an investigation into the country’s five largest for-profit nursing home companies, including Consulate Health Care, Politico reported in 2020.

Creative Ways to Wring Profits

As the New York Times reported in 2020, while senior care facilities often struggle financially, their private equity-backed owners have “found creative ways to wring profits out of them.”

Some of these creative ways include charging their operators “hefty management and consulting fees”; buying the real estate from the operators and then leasing the buildings back to the operators, while upping the rents; and pushing their operators to buy products and services from companies that are controlled by the investors.

The real estate plays these firms pull off are particularly lucrative, the New York Times noted, because the buildings are often “more valuable than the businesses themselves.”

A 2018 article in the Naples Daily News described how these arrangements work in Consulate Health Care facilities owned by Formation Capital, the state’s largest provider.

Consulate Health Care and Formation Capital both operate a network of other related businesses—including “real estate, management, rehabilitation and other companies”—that they use as subcontractors for the nursing homes they own.

So when “[t]axpayer money flows to Consulate nursing homes,” the article explained, some of the money also goes to subcontractors that are related to the owners, Consulate Health Care and its controlling company, Formation Capital. “[A]nd profits earned go to the chain’s owner, the Atlanta-based private equity firm Formation Capital,” the article stated.

One of the Consulate Health Care nursing homes highlighted in the article pays its owner and management fees to two Consulate companies and also pays its lease payments and rehabilitation service fees to providers that are both related to Formation Capital.

“In each case,” the article said, “the money flows back to Formation Capital and its wealthy investors,” which include Safanad.

Pansophic Learning and Accel Schools operate similar business arrangements that help their organizations maximize their profits, according to a 2021 report by the Network for Public Education (NPE).

Much in the same way Consulate Health Care facilities and Formation Capital push their nursing homes into contracts with their other related businesses, Accel and Pansophic use “a complex web of corporations,” according to NPE, to “control the operations of the school and in doing so, steer business to their related services.”

The report highlighted Accel-managed Broadway Academy, in Cleveland, a charter school previously owned by White Hat Management, according to the Accel Schools contract with the school.

Under the “fees” section in the terms of that contract—originally with for-profit management company Chippewa Community School, LLC, which is now a subsidiary of Accel Schools Ohio LLC—the school, referred to in the contract as the corporation, pays the operator (Accel, by way of its subsidiary Chippewa Community School, LLC) 96 percent of the school’s monthly qualified gross revenue, which is the per-pupil revenue the school receives from the state. In return, Accel is the sole source to provide the school with school staffing and professional development, school management and consulting, textbooks, equipment, technology, student recruitment, building payments, maintenance, custodial service, security, and capital improvements.

In other words, there’s nothing that stops Accel or Pansophic from creating yet more subsidiaries and other related companies that can do business with Broadway Academy. According to the contract, Accel can subcontract services “without the [Broadway Academy] Board’s approval,” and property purchased by Accel “shall remain… [Accel’s] sole property.”

According to NPE, these kinds of contracts, known as “sweeps,” are commonplace in the for-profit charter school industry.

“Sweeps contracts give for-profits the authority to run all school services in exchange for all or nearly all of the school’s revenue,” said the NPE report.

Taxpayer funding for the Broadway Academy that isn’t swept up by Accel’s continuing fee must be depositedinto a “Student Enrichment Fund” for “educational services in the areas of student cultural activities[,] … supplemental tutoring services, and other programs.” Accel has sole authority to “propose uses for such funds,” and “85 percent of all Student Enrichment Funds not spent during the fiscal year in which they are received shall be paid over to [Accel].”

While Accel’s contract with Broadway Academy doesn’t include real estate, the authors of the NPE report searched the database of Ohio charter school contracts, called “community schools documents,” and found that “Global School Properties Ohio, LLC holds the leases for many Accel charter schools. The… [landlord] is at the same 1650 Tysons Blvd. address in McLean, Virginia, as Pansophic [Learning].”

Profiting From D- and F-Rated Schools

School choice and charter school advocates are often quick to defend for-profit charter companies and their private investors, arguing that they are “sector agnostic” about who owns and operates a school and care only about the school’s “results.”

But what constitutes good results in education is a much-debated topic, and studies about the results of for-profit charter schools have found mixed results at best.

A 2017 report from Stanford University’s Center for Research on Education Outcomes (CREDO) found that students who attend for-profit charter schools have weaker growth in math than they would have in a district public school and similar growth in reading. Students in nonprofit charter schools experienced stronger academic growth in both subjects than their peers enrolled in for-profit charters. The differences were “significant,” according to the study.

Also in 2017, Chalkbeat reported, “studies comparing for-profit schools to nonprofits and traditional public schools in the same area don’t find consistent differences in performance, as measured by test scores.”

None of these studies examined the performance of Accel Schools or the impact of private equity in the for-profit charter industry.

But based on Ohio’s A-F grading system, Accel Schools in the Cleveland area, where the management company has its highest density of schools, has no schools with A or B ratings from the 2018-2019 school year, the last one measured due to the pandemic. There are three C-rated schools, including Broadway Academy. Eleven others are D- and F-rated schools. Among the F-rated schools is the school Trump visited in 2016, the Cleveland Arts and Social Sciences Academy.

The problems posed by the charter school industry and its for-profit sector have not gone unnoticed by Democratic Party elected officials and their voters.

A 2021 survey found that public support for charter schools is waning, especially in the Democratic Party where favorability has fallen to an all-time low of only 33 percent. Our Schools has previously noted that Democratic Party politicians are steadily drifting away from their once-avid support of the industry, especially the ones operated for profit.

Nevertheless, out of seven charter schools that have applied to open in West Virginia, where charter schools had not been allowed to open until 2021, five of the proposed schools would be operated as for-profit entities, and of those five, three would be operated by Accel.

By Jeff Bryant, a writing fellow and chief correspondent for Our Schools. He is a communications consultant, freelance writer, advocacy journalist, and director of the Education Opportunity Network, a strategy and messaging center for progressive education policy. His award-winning commentary and reporting routinely appear in prominent online news outlets, and he speaks frequently at national events about public education policy. Follow him on Twitter @jeffbcdm. Produced by Our Schools.

Joy Hofmeister, a lifelong Republican and Superintendent of Public Instruction in Oklahoma, has decided to join the Democratic Party and run for Governor against incumbent Kevin Stitt. Stitt is a devotee of Trump, and Oklahoma is a deep-red state. Hofmeister is a strong supporter of public schools and a very brave person. She was interviewed by Erin Burnett on CNN.

I met Joy a few years ago when I was invited to speak to the state’s superintendents. We had a chance to talk, and I was very impressed by her candor, her thoughtfulness, and her strength of character.

If you are reading this and you live in Oklahoma, get involved and help her. If, like me, you don’t live in Oklahoma, send money to her campaign. As soon as I have a link to her campaign, I will post it.

Thank you, Joy, for taking on this formidable challenge. We need more people like you in public life: principled, honest, intelligent, devoted to the common good.

A regular reader called Bethree summarized the Rhode Island situation, in which friends of the Governor won a $5 (plus) million contract, although the corporation was formed only weeks before the contract was awarded and was the high bidder.

She wrote:

Read the wpri.com coverage 9/7,8,14 for the nitty-gritty (google wpri.com McKee ILO). As a one-time procurement supervisor for an engrg co, I found it highly entertaining.

Summary: ILO was incorporated 2 days after McKee’s March 2 election, and invited by his office to submit a bid for the work March 23. 5 bids received in April: 3 bidders knocked out during tech evaluation.

The two remaining bids– $8million vs just under $1million, made it obvious that the scope of work was, shall we say, imprecise. Results of rebid (? Or perhaps just an arm-wrestling session—unclear): ILO $6million, other guy $3million. ILO was apparently given the nod due to its long work history of absolutely bupkis, sadly other guy’s 20-yr history as a state ed consultant just… didn’t measure up. But, no worries– West Ed gets to share the spoils: $5million for ILO [scope K12], $1million for WestEd [scope colleges, U’s]. “’The Review Team believes that no additional time should be wasted on this procurement or a rebid,’ the four-member panel’s final report said.”

“We’ve supported people who get the work done…” McKee said at his weekly news conference Tuesday. “So it didn’t matter who referred or who may have had a relationship. I just want good people who can figure out how to help the state of Rhode Island and education, and that’s what we got.”  

“Magee [CFC boss & close McKee buddy/ donor via his brother’s 50CAN PAC] said Chiefs for Change isn’t working with ILO on the contract.” ROFL. Let’s just pretend we didn’t notice ILO was incorporated virtually yesterday, and its partners left Chiefs for Change to form ILO.

The state’s bid package put ILO in the catbird seat from the get-go. Although RI is paying for this work out of Covid-19 aid fed funding, the scope asked for expansion of “municipal education offices” outside the purview of traditional LEA’s. That’s a scheme realized in Cumberland by then-Mayor McKee and buddy Magee of CFS. McKee has 5 more such offices planned, to be run out of his office, for the [state-run] Providence school system. A full half of ILO’s proposed workhrs are devoted to that thinly veiled ed privatization; stated goal “to address lost learning and catch up and long-term learning programs.”

That leaves $2.5million for safe school reopening during covid. How is ILO doing 2 wks after students returned to bldgs? “…RI Assoc of School Committees exec dir Tim Duffy… surveyed all school supts and school chairs… ‘So far, there’s only one district that’s asked the ILO Group to review their school reopening plans, and that was Little Compton. The rest… haven’t been contacted and are not even aware of the services the consulting firm offers… reopening efforts this year have been guided by the U.S. CDC, the RI Dept of Health and RI Dept of Education.” He also noted the timing of the ILO news: ‘School reopening has already happened.’ Duffy’s comments contrasted with ILO’s Tuesday, when partner Cerena Parker cited helping schools reopen as one of the consulting firm’s biggest accomplishments so far.”

The authorizer of the Hmong College Prep Academy in St. Paul, Minnesota, wants to fire the superintendent of the school after learning of big losses in the school’s funds.

A St. Paul charter school’s authorizer has placed the school on probation and recommended the board fire its superintendent after she lost $4.3 million of the school’s money investing in a hedge fund.

The authorizer, Bethel University, said Hmong College Prep Academy’s failed investment “illustrates areas of great concern related to managing finance, governance and legal compliance.”

Christianna Hang, superintendent and chief financial officer, founded the school in 2004. It’s now the state’s largest single-site charter school, with around 2,400 students in the Como neighborhood, and is building a $43 million middle school with financing facilitated by the city of St. Paul.

Hang was looking for opportunities to pay for that project when she ended up wiring $5 million to a hedge fund in 2019, in violation of the school’s policy and state law. The school is now suing the hedge fund.

Bethel’s Aug. 30 letter also cited “significant concerns” about conflicts of interest regarding the superintendent, her husband and a former school board member.

The first conflict involved Bridge Partner Group, a company owned by Hang and her husband, Paul Yang. The board in January approved a contract with the company, effectively converting Yang from the school’s chief operating officer to an independent contractor on a fully guaranteed, five-year contract worth around $190,000 a year; the board later reversed that move.

The second conflict involves Northeast Bank, which was chosen to finance $7 million of the middle school project while one of its vice presidents, Jason Helgemoe, served as vice chair on the Hmong College Prep board.

Bethel has directed the board to spend 90 days making numerous changes at the school, including dividing superintendent and chief financial officer into two separate positions and hiring a financial consultant who reports directly to the authorizer.

In addition, Bethel is “recommending” the board fire Hang and replace her with someone with no prior ties to Hmong College Prep and for the board to appoint a chairperson who is not employed by the school; the current chair is a teacher.

If you are wondering why there is a Hmong charter school, Minnesota has a long-established practice of authorizing racially and ethnically segregated schools. Defenders of the practice say the children are more comfortable going to school with children of the same background.

I remember when Southerners said the same about segregated schools in the 1950s.

When was the last time your school had millions to invest in the market?

Angie Sullivan teaches first-grade students in a Title I school in Las Vegas. She writes regularly to every member of the legislature and to journalists to tell them what it is like from a teacher’s perspective.

She wrote this missive:

Shannon Bilbray-Axelrod should recuse herself from charter school legislation.  It is unethical for her to line her lobbying pocket and then work on charter legislation.  Scott Hammond and Carrie Buck should also recuse themselves from working on charter language having made millions in the business.  Unethical.  

While you are in AB420, you should amend the Charter Authority requirements.   

To sit on the 9 member board, you should have not earned money from a for-profit school.   

The number of recusals from Charter Authority board members while trying to do business is ridiculous. 

Oftentimes decisions are made with a questionable quorum because too many folks on the dais are making money from the business and have to recuse. 

If you are a charter lawyer, charter consultant, charter owner – not the time to sit on the decisions making board.  It is unethical.   

You should have to wait 3 years after profiting from charters before being allowed to sit on the board.  
The chair of the Charter Authority should not run a charter.   

This leads to awkward business.   

The Chair leaves the dais to go to the table to have the board give her permission and/or money.  I have seen Chair Melissa Mackedon who runs a charter in Fallon do this several times.   

It is like insider trading – benefitting their business and themselves.  Then popping back up into positions to hand out money and favors to other charters.  Charter Board Members should not be on both sides (giving and receiving) routinely in meetings.  Unethical.  

Former or current legislators should not sit on the Charter Authority Board.  It appears that they legislated to make millions.  Pat Hickey and Randy Kirner are examples of folks who recently left their positions and then became part of the Charter Authority Board.

Lawyers like Jason Guinasso who have chaired the board should not be able to come back a few years later to manipulate charter language or the board.   He addressed them as friends trying to take advantage of his connections.  Recently Guinasso approached the board from the table on behalf of a charter he most likely set-up for failure while he was chair.  The theft and lawsuits cost Nevadans.


https://www.nevadacurrent.com/2020/06/29/lv-charter-school-alleges-it-paid-1-6m-to-utah-management-company-for-nothing/

https://kutv.com/news/beyond-the-books/nevada-charter-school-ends-business-ties-with-american-preparatory-schools-in-utah

New EMOs/For-Profit Service Providers should not be allowed in the state.  No more new for-profit campuses under their umbrellas either.  They have made a huge mess.   Academica basically has a weird monopoly with different branches.   They are posed for rapid expansion.  Folks outside the state watching Academica in Nevada are very concerned.  

For-profit corporations like Academica take advantage of states like Nevada.  Language should be included to prevent rapid expansion and the ability to siphon money into side businesses.   This robs students and gives millions to side businesses.   Folks like Gulenist Soner Tarim should not be able to come into Nevada and apply for a charter – with language in the contract that gives them 12% off the top and ability to rapidly expand by being a EMO/Service Provider.  These should be two different things – EMO/Service Provider and Charter Applicant.  These administrators and side businesses are making a ridiculous amount of money and do not have to bid out their services.  The public should be able to see these contracts since the taxpayer is paying.  Folks should not be handing contracts out to their friends and family.

EMOS/Service Providers should not be allowed to break the charter diversity laws like Academica did intentionally when opening the Northern Pinecrest.  Academica should be closed for that.

PPP loans were given to both the charter campuses and the management corporations and all the side businesses.   How much money did a for-profit charter really get during the pandemic?   They got money for the EMO/Service Providers/Campus/Friends/Family etc?  Then held an informational meetings to warn everyone “not to say anything”.  

125 Florida charter schools already funded by taxpayers received $50 million in PPP loans https://www.abcactionnews.com/news/local-news/i-team-investigates/125-florida-charter-schools-already-funded-by-taxpayers-received-50-million-in-ppp-loans

I hope the FBI comes and arrests everyone involved in this mess and lining their pockets. 

https://www.nevadacurrent.com/2020/12/24/nevada-charter-schools-got-millions-in-ppp-loans/ 

$350+ Million in education money annually and not one person knows what it is spent on.

And seems like legislators are just fine with that?


The Teacher,

Angie Sullivan


https://www.leg.state.nv.us/App/NELIS/REL/81st2021/Bill/8052/Text